For the first time ever, the Federal government has established an official definition for what constitutes an ‘Australian business’.
The definition was established primarily as a guide for businesses seeking to win Commonwealth procurement contracts, something that has long been advocated by the business sector as a means to ensure greater transparency, provide better insight into who has won Commonwealth tenders, and assist in making businesses more competitive in tendering.
Identification as an Australian business will depend on:
- Having 50 per cent or more Australian ownership, or being principally traded on an Australian equities market,
- Having Australian tax residency, and
- Has its principal place of business in Australia.
From 2025-26, businesses on the Whole of Australian Government Panel arrangements will be able to report their Australian Business status in line with the definition on the Australian Government’s Supplier Portal, with this opportunity expanded to all AusTender registered businesses in the future.
“Procurement is one of the most important economic levers government has – helping to grow our economy, support small and medium businesses, and benefit Australian workers and consumers,” said Minister for Finance Katy Gallagher. “Being able to easily identify Australian businesses in tender processes will help make them more competitive, and guide future initiatives to better support them.”
In relation to this, the Federal government also updated guidance on the Consideration of Broader Economic Benefits in Procurement with the inclusion of a range of changes such as consideration of weightings, priority outcomes, and contracting.
In addition, the Government has also issued the “Broader economic benefits in ICT sector procurement” planning and engagement guidance to assist ICT businesses navigating Commonwealth procurement.
Commonwealth Government procurement has been considered a major economic lever, with on average around $70 billion and 80,000 contracts committed to each year.
“When we say we want Australian companies to have a chance to provide goods and services to government, we want genuine, true-blue Australian businesses to do so,” said Minister for Industry and Science Ed Husic. “This new definition helps give confidence that this is the case – and helps make the job easier for government officials too.”
The government stated that these announcements reiterate its commitment to Australian businesses as part of the Future Made in Australia agenda. Husic said, “These changes help smaller Australian businesses have a fair crack, providing genuine competition against big multinational firms for government contracts.”
